New project launches decline by over 50%
New launches declined by over 50% in the first quarter of t his year (January to March 2015) against a background of l ess t han expected sales in the residential sector this year, says a new report by real estate consultancy Cushman & Wakefield.
The period saw the lowest number of project launches over a period of two years. With a total of 24,700 units launched this quarter, the decline was recorded to be over 50% year– on–year (y-o-y) over the same time last year. This is because developers are holding back on new launches and focussing on completing existing projects, the report says.
Among new unit launches during the first quarter, only the high-end segment registered a y-o-y growth of 26%. Affordable housing segment reduced significantly by over 80%. Mid-segment housing reduced by 63%. It was seen that developers are inclined towards the high-end segment where profit margins are typically high and builders are looking at offsetting increasing land and development costs.
Bengaluru witnessed a y-o-y decline of 76% in unit launches with nearly 4,100 units launched in the first quarter of this year compared to 16,800 units in the same quarter last year. Kolkata witnessed a decline of 67% and Mumbai 63%. Delhi NCR saw unit launches declining by 58%.
There has also been a reduction in the average number of units per project which has declined from 287 units in the first quarter last year to 233 units per project this year. The average number of units per project was highest (669) in Hyderabad, followed by 567 in Mumbai. In other three cities, namely, Delhi-NCR, Kolkata and Pune, comparatively smaller projects with lesser number of units were launched in the first quarter this year. The number of units launched per project further decreased in this quarter, as developers launched smaller projects with lower investments.